CITY OF HOUSTON DISPARITY STUDY: Our interest was ransomed to secure his next job…

“Mr. Michel gave a win to NERA and indirectly a law firm he has strong ties too – to help him land a job once he leaves his post as City Attorney. We received this information from a very reliable and high-ranking source.”

Many of you have contacted me with questions regarding what happened with the Disparity Study process and what all of the fuss is about.

Well, here’s the short and skinny…

In a nutshell, the City of Houston Director of Legal, Arturo Michel, defined a procurement process and source selection criteria in its Request for Proposal; and then, changed then changed the source selection criteria at the very end of the process. And, then today despite this change being known by City Council – it voted 14 – 1 (Council-member Jolanda Jones was the one dissenting vote) to issues a contract to the NERA Economic Consulting (NERA).

So, why did Mr. Michel decide to breach the integrity of the city’s source selection and procurement process?

In short, self interest.

Mr. Michel gave a win to NERA and indirectly a law firm he has strong ties too – to help him land a job once he leaves his post as City Attorney. We received this information from a very reliable and high-ranking source.

For now though, I’d like to say to Mr. Michel; “nothing should be worth a man’s integrity. Nevertheless, I genuinely wish you well in your future career”. Let’s just hope that this infraction does not become prophecy for future Professional Service procurements at the City of Houston.

But, back to the question of what this is all about – let’s start from the beginning.

In sum, the City’s conduct in connection with the selection of NERA was not only inconsistent with the process outlined to the potential consultants during the pre-bid meeting. It was also in violation of the Courts Order of the Settlement Agreement in the Krossman litigation and the City Ordinance No. 2009-280.

Specifically, my concerns have centered on the lack of transparency in the procurement process after August 19. 2009. At the August 19th Stakeholder meeting, we (stakeholders) were told by City of Houston representative personnel that quote:

“Arturo has narrowed the field to NERA and D. Wilson, but he is leaning towards NERA”.

The question was asked by the Stakeholder community what key differences between the two firms warranted Mr. Michel’s slant towards NERA. The City of Houston representative personnel stated that there were two key areas of differentiation; specificity of how detailed each firm was going to look at NAICs codes and the approach that would be taken in regards to the Rothe Development Corporation vs. Department of Defense ruling.

The summary take-way was that, based on the concerns voiced by the Stakeholder group, Mr. Michel was going to contact both proposers AFTER the August 19th stakeholder meeting to get further clarity regarding both issues – then communicate that to the Stakeholders.

However, I can confirm that the proposers were not contacted by Mr. Michel after the meeting – and no follow-up occurred with the Stakeholders. In fact, the anticipated schedule that was communicated to the Stakeholder group on August 19 was over-shot by almost 60 days; with no formal communication by Mr. Michel and his team to the Stakeholder community until the MWBE Committee meeting on November 5. There was simply no continuity of activity between the dates – and thus, the Stakeholders played no role in the FINAL selection.

As many of you all should recall from December 3, 2009 (the date of my telecom with Mr. Michel) up to today that I have been asking the simple question; “By category established on page 28 of the Disparity Study RFP, what was D. Wilson’s score vs. NERA’s”?

Mr. Michel assured me, with witnesses from the City of Houston on the telecom, that he had used the criteria specified in the RFP and would provide it shortly after our telecom terminated.

Yet, in his letter issued originally on February 1 to the stakeholder community and others, and recently to City Council, Mr. Michel states:

“I did not prepare a score sheet, the differences between NERA and the others is apparent in their proposals in the sections regarding strategy & operations and expertise/experience/qualifications”.

Well, what about page 28? Further, what happened between December 3 and February 1 for Mr. Michel to change his position from having a score sheet to not having a score sheet? In essence, contrary to his initial statements, Mr. Michel now posits that he worked out a very complex problem in his head and simply provided us with the solution without any explanation of how he got there.

Further he is telling us (Stakeholders), including City Council, IT IS BECAUSE I SAY IT IS!

Well, City Council might bow to this type of bullying – but we shouldn’t. This type of arrogance should not be tolerated by ANY civil servant, elected or otherwise. Mr. Michel is not accountable to himself, but the stakeholders and citizens to whom he ultimately reports too.

Moreover, source selection criteria “bait and switch” should not be allowed and I strongly encourage Council to send a message loud and clear that this practice will not be tolerated by civil servants at any level.

In summary, the citizens of Houston are owed and deserve transparency and accountability in ever process ensued by the City of Houston and its staff. If we allow this one infraction, it will only beget more in the future.

I sincerely hope Mr. Michel gets the job he is seeking and that the ransom of his professional integrity is worth compromise.

To my fellow Stakeholders, it would appear that at the end of the day our participation was nothing more than a PR move and our contribution was essentially prostituted by the City of Houston Legal Department. Even sadder is the City Council complicities.

Thank God we live in a Democracy where we can hold those in office accountable; I’ll bring this topic up again in 2 years.

– Rudy Sutherland, Serial Entrepreneur & Small Business Evangelist


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